Job growth disappointed in April, with the U.S. economy creating 115,000 jobs. Expectations were for an increase of 160,000 jobs. The report did note upward revisions of February and March job growth that added 53,000 jobs. April’s pace of job growth is the lowest since October. Despite the slow job creation the unemployment rate fell to 8.1% as labor force participation fell to decade lows.
ABA Chief Economist James Chessen commented, "When the economy is slow, as it was is the first quarter, job growth will slow. As the economy picks up, so will job growth."
High oil prices have likely restricted new hiring. "Gas prices have an impact. If you have other input costs rising, you have to compensate on other expenses, because you can't raise prices on your products,"commented Chessen.
Warm weather early in the year may be responsible for some of the slowdown in April, as employers added jobs earlier than expected. April’s report indicated slowdowns in seasonal industries such as construction, leisure/hospitality, and manufacturing.
The private sector created jobs for the 26th consecutive month, adding 130,000 jobs. This is a slower pace than the 166,000 private sector jobs added in March. Both services and goods producing sectors slowed job growth. The service sector created 101,000 jobs, down from 116,000 the previous month. The goods-producing sector added 14,000 jobs, down from 38,000 in March.
The public sector continues to drag on job creation, shedding 15,000 jobs in April.
The unemployment rate fell to 8.1% in April. Although this would normally be a good sign, the reason for the decline was a continued fall in the labor force participation rate. The labor force participation rate fell to 63.6% in April, its lowest level since 1981. If labor force participation were at ’04-’09 levels (66.1%) the unemployment rate would be 11.5%.
Read the report.